Numic is joining Pier Two

Node Operators
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Dear Lido community,

We are excited to inform you that Pier Two has acquired Numic’s validator business, including its team and resources.

Numic and Pier Two believe this is in the best interests of Lido on Ethereum for a variety of reasons, including:

  1. The current Numic team will continue working with Pier Two to ensure high quality infrastructure.
  2. Pier Two is already participating in the Lido on Ethereum protocol through the Simple DVT Module (both on testnet and mainnet), using DV infrastructure such as SSV, Obol, and SafeStake.
  3. Numic is based in Queensland, Australia with Pier Two also being headquartered in Queensland, Australia. Pier Two has a global team with 24/7 monitoring, alerting, and on-call engineers. Accordingly, the geographical diversity of node operators using Lido on Ethereum will not be impacted.
  4. Pier Two brings further security standardisation, being ISO 27001:2022 certified while also currently working toward SOC-2 certification. Pier Two’s security posture bolsters Lido’s security position.
  5. Pier Two aligns closely with Lido’s purpose statement by building an Ethereum light client called Lantern which has a vision to keep Ethereum free to access and globally available.

The Numic team is currently unstaked with zero keys and is awaiting reinstatement, so the path forward can be discussed openly.

We would be delighted to answer any questions the community may have in the below thread.

For more information on this transaction, read our blog post.

Pier Two team

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Numic is looking forward to be working with Pier Two. We’re confident that by teaming up we can be an even stronger addition to the Lido and Ethereum ecosystem.

Pier Two’s resources and certifications will help us to achieve better results and strengthen compliance. At the same time Pier Two will gain our operational knowledge to enhance their systems and processes.

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Thank you both to @Pier_Two and Numic for providing us this news. Given the other acquisition that occurred recently, I personally suggest that we proceed with considering this news similarly. Namely, to:
a) assess whether as a result of the business deal there are material changes to validators operations (different people / different infra), and
b) assess whether as a result of the business deal there are material changes to the organizational structure and “meta-properties” of the node operator (eg impact on geographic and jurisdictional dispersion of the operator set).

Some of the above questions have been partially answered by the information provided above, but it would be useful to have a more structured/formal response in order to proceed with the detailed considerations.

In this specific case, since Numic is currently at 0 active keys as a part of the remediation efforts for the previously disclosed incident, I believe there is no urgency to consider immediate pausing or exiting of the operator.

Based on a response from Pier Two to the above questions, I would suggest we similarly (to the CMF <> Galaxy case) ask the community and LNOSG analyze and discuss the answers, and suggest a course of action to be put forth to tokenholder vote, in order to determine whether the operator in its new form should remain in the curated set (or a secondary option should be explored).

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Proposal: Pier Two remains as successor of Numic

Summary of Proposal

Pier Two acquired Numic Validator Services (Numic VS) (infra+team). Pier Two is proposing to Lido DAO to approve of Pier Two and Numic, as a newly merged entity, remaining in the curated set. Pier Two and Numic VS believe this is in the best interest of Lido DAO for a variety of reasons, as explained below.

The Rundown

Numic VS was voted into the Lido Curated Operator Set in onboarding Wave 5 in August/September 2023. Numic VS scaled up to 8991 keys early this year before a security incident that was reported to the DAO and is currently being resolved. Following this incident, Numic VS withdrew all validators for precautionary measures. Currently, Numic VS has no keys and is awaiting being reinstated after providing evidence for an increased security position.

The current Numic VS team will continue to work with Pier Two to ensure that the validator infrastructure is being effectively managed.

In responding to your questions:

There are no Material Changes to Validator Operations (People) or Meta Properties (Geo). There are changes which propose that Pier Two’s infrastructure is used instead.

We read comments in the recent Lido DAO post regarding Galaxy’s acquisition of CryptoManufaktur and have laid out our considerations regarding whether there are any “Material Changes” that should be considered in relation to this proposal:

Validator Operations (People): Pier Two has acquired the Numic Validator infrastructure and the Numic team will be working alongside Pier Two to ensure that validator infrastructure continues to be managed appropriately.

Validator Operation (Infrastructure): The newly merged entity (which currently has no keys) will use Pier Two’s infrastructure instead of the old Numic Infrastructure which was compromised.

Meta Properties: Numic is based in Queensland, Australia, Pier Two is based in Queensland, Australia, with a global team that has 24/7 monitoring, alerting, and pager duty rosters. The infrastructure itself will still be run in Australia.

Why Pier Two

Pier Two is an Australian based blockchain infrastructure operator focused on servicing the APAC region’s funds, exchanges, custodians, and networks. As an ISO 27001 certified operator, Pier Two has been staking since the Beaconchain launched in 2020. Why Pier Two is capable and adds value to Lido:

  • Existing DVT Operator and Lido Contributor: Pier Two has been playing a leadership role in Lido’s DVT efforts with SSV (Blazing Basilisk cluster and Delightful Dolphin cluster), Obol (Whistling Wolf cluster and Covert Cougar cluster), and SafeStake (Agile Anteater testnet). Worthy of mention is that Pier Two participated in onboarding Wave 5 but was unsuccessful in its application.
  • Further Decentralisation: Numic VS is based in Queensland, Australia, and as it happens, so is Pier Two. Providing the same credible geographic decentralisation. From a client diversity perspective, we happily run Lighthouse, Teku, Nethermind, and Besu. We have a hybrid bare metal and cloud setup, running our nodes on bare metal and managing key infrastructure on cloud. We use our own IAC (Infrastructure as Code) to manage deployments, which incorporates tools such as Ansible and Terraform.
  • Performance: Pier Two is a consistent performer on Rated, consistently appearing in the top 10 validators globally in terms of performance.
  • Security: Key backups with secure offline backups in secure storage, ISO27001:2022 certification alongside Information management, and security software.
  • Educator: In addition to this, we’ve written numerous educational pieces on topics such as DVT, client diversity, and many more. (see 1, 2, 3, 4, 5 as examples).
  • Ethereum Client Builder: Pier Two is also building a light client for Ethereum in C# called Lantern. Pier Two’s inclusion in Lido will enable the business to continue to provide accessibility for Ethereum in the coming years.

Other Acquisitions and Likeness

This isn’t the first merger or acquisition that has occurred within Lido - there are precedents of acquisitions regarding Certus One, Anyblock Analytics, and Prysmatic Labs. More recently, on 17 July 2024, Galaxy Digital acquired CryptoManufaktur. In this case, Pier Two and Numic is similar to the Galaxy and CMF, with the caveat that Pier Two has also been a contributor to Lido and will continue to contribute to the DVT onboardings.

Next Steps

We believe that, based on the information provided above, Pier Two and Numic, as a newly merged entity, should remain in the curated set.

If there are any community members or LDO holders who would like to discuss finer details - Pier Two would be grateful for any discussions. Please reach out to our Discourse inbox or our websites to get in touch.

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Thank you for the detailed response.

I would propose that we ask the LNOSG to do an assessment of the questions at hand as well as the responses. I’d like to state that Pier Two has been an exemplary participant in SDVT and in the most recent onboarding round (Wave 5) scored highly, and was highly vouched for by existing node operators. Personally I agree that there aren’t material changes, except in one case which may be debatable:

Validator Operation (Infrastructure): The newly merged entity (which currently has no keys) will use Pier Two’s infrastructure instead of the old Numic Infrastructure which was compromised.

In this case, since the running of the infrastructure would use Pier Two’s infrastructure instead, I think there’s a material change. This doesn’t mean that the NO shouldn’t continue in the set, and it’s also possible that the new infrastructure may be overall better, but it just suggests that perhaps the LNOSG should consider developing a slightly stronger understanding of how the infrastructure would be operated before making its suggestion to the community.

As such, I would propose that, similar to the CMF => Galaxy development, there is ample time for the community to discuss and ask any questions they may have of Pier Two, for the LNOSG to determine what kind of additional questions/follow up they may want to perform, for the LNOSG to offer a suggestion, and then if there are no objections or other paths proposed to have a token holder vote on the matter.

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This approach is agreed. Pier Two look forward to the LNOSG’s assessment.

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